India’s Rural Distress

Though it sounds cliché but India’s rural distress is a serious challenge and if not addresses is a ticking time bomb for any Government . The amount of distress has skipped attention of Urban elite and election are a better reminder of it for all

Reason primarily are as follow:

1. Higher Population growth and lower per capita land holding due to family expansion.
2. Almost stagnant Agriculture growth
3. No substantial /notable productivity improvement over last four decades after Green Revolution
4. Lower contribution of Agriculture to GDP – currently stands at 13% compared to 50% at the time of Independence .Its falling every year . For developed countries this stands at 5-6% and even lower . The movement is irreversible , but can be slowed down
5. Slower Urbanization

Here can be the plan to address it  :

Short term Plan:

1. MNREGA with clear goal of  Productivity improvement , otherwise Inflation will eat into all the benefits
2. Move towards Horticulture and Dairy
3. Value added Farming like Organic Farming
4. Contract Farming

Long Term Plan:

1. Encourage Movement of people from rural to urban areas
2. Skill Development towards Services
3. Development of Big Urban conglomerates all over India
4. Development of Modern Retail and supply chains
5. Use of Technology for substantially improving Quality of Education in Rural areas
6. Fillip to River Linking and micro and small dams to substantially increase cultivable land

The Game Changer:

1. Transfer of Basic Minimum Income ( BMI) to all  - Needs higher tax to GDP ratio at least 25% from current around 17% . GST can be the tool to help to take this leap as it helps to plug tax leak and hopefully fills government coffers
2. All other plans above will not achieve what BMI can achieve in one stroke.
3. I predict that BMI will be implemented in a few years , technology is available today , though Government revenue is awfully short to provide such an income to all